It says the price drop is due to unfavourable changes in the exchange rate, lower than expected adult milk powder sales in China, and a downward revision on the value of the milk supplies it currently holds.

The board of Murray Goulburn says the company will be best served by new leadership under the changes.

The chief financial officer Brad Hingle, along with Mr Helou, will also leave the co-op after finalisation of the 2015-16 annual results.

"During my time at MG we have transformed the company's capabilities and capacity and in the process delivered two consecutive years of premium milk prices for Australian farmers," he said in a statement.

"While maintaining this price has proven to be difficult in current market conditions, I firmly believe MG has the foundations in place to support a strong and successful business in the years ahead."

Global dairy oversupply weighs heavily on prices

MG says it now expects to achieve net profit after tax of between $39 and $42 million.

The company in February had forecasted an after tax profit of around $63 million. Early forecasts had tipped an $89 million after tax profit.

MG entered a trading halt on Friday, April 22, when it announced it was reviewing its operations.

Shares in the co-op closed at $2.14 at the end of trade the day before.

Trading of MG shares resumed when the ASX opened, immediately falling 35 per cent to around $1.40.

Farmer fears price cuts will force suppliers out of the dairy industry

Dairy farmer Andrew Leahy, from Murrabit in northern Victoria, said the price drop came as a shock.

He said he was disappointed the prospect of a price drop wasn't raised at supplier meetings earlier in the year.

Mr Leahy said the high price of water, combined with price cuts, would force farmers out of the industry.

"It's just unprecedented...the main impact will be people just won't be able to afford to do it and probably start selling cows and there will be some more dairy farm businesses shaken out of the system that we will lose," he said.